Which cities in Europe are considered the smartest?

Imagining a smart city. Reverse image shot of a city scene, by Tim Sandle.

The latest IMD Smart City Index has revealed that Europe has the smartest cities, holding seven out of ten positions. North American cities, once dominant in such rankings, have fallen again and they been in decline since 2021.

In terms of technologies driving those areas showing a rise in smart city capability, one standout is photonics. This is because many smart city developments depend on the science of light–a field that enables environmental monitoring, security systems, traffic management, and even autonomous driving. North American cities could leverage these technologies to take the lead.

North America declines in annual smart city rankings

Europe is leading the smart cities landscape, with seven cities in the top ten, and Zurich taking the lead.

Commenting on the European dominance, as well as what makes a ‘smart city’, is Antanas Laurutis, CEO of a company called Altechna, who states: “We often don’t realize what’s behind most of the tech that powers smart cities. Temperature sensors, air quality, traffic management, security–it’s all powered by photonics. It really is the backbone of smart cities.”

Defining the ‘smart city’

Smart cities use digital technologies that improve daily human life, affecting logistics, traffic management, digital communication, environmental monitoring, and other areas.

The importance of smart city initiatives continues to grow due to the transition from Industry 4.0 to 5.0. Industry 4.0 was a process that represented global changes leading to the integration of digital technologies into manufacturing and industrial processes. It marked the age of automation.

According to a new study, a shift to Industry 5.0 can be explained by the challenges societies have had to face recently, such as global climate change, pandemics, warfare, refugee crises, and others, all of which impact daily human lives (see: “Industry 4.0 vs. Industry 5.0: Co-existence, Transition, or a Hybrid“). All previously achieved technological automations have to shift to human-centrism and primarily help improve the life quality of individuals. Examples of associated, enabling technologies include digital cognitive clones twinning human decision-making behavior.

“This human-first approach in European cities has often been observed even before smart cities were a hot topic. Europe was historically successful in adapting these human-centric approaches, however, we now observe Asian cities rise due to the same reason. These positions shouldn’t be taken for granted as competitiveness is increasing globally,” Laurutis adds.

Will Europe remain dominant for long?

While Europe remains competitive in many areas crucial to smart cities, the latest World Economic Forum report, published in January 2025, indicates potential areas where Europe might fall behind, giving up some positions to the U.S. and Asia.
Europe’s starting point for competitiveness in key technology areas.

According to Laurutis, mobility and environmental technologies are the ones to watch.

“Environmental mapping technologies are advancing fast, faster than cities adopt them. Soon, we will have drones flying around, continuously surveying landscapes, observing biodiversity, and identifying changes in precise parts of cities,” he said. “Another area that will determine which cities will be considered smart is mobility, including autonomous driving, powered by LiDAR systems. This is something where the U.S. is expected to take the lead.”

Autonomous vehicles rely on photonics-powered LiDAR (light detection and ranging) systems. They navigate much like a person walking through a dark room with a flashlight. By sending out rapid laser pulses and measuring their reflections, these vehicles create a detailed 3D map of their surroundings in real time. This “digital vision” allows them to detect obstacles, pedestrians, and other vehicles with precision, ensuring safe and efficient movement on the road.

Mobility and LiDAR

Advancements in photonics also enhance mobility and logistics through innovations like delivery drones, further enhancing the mobility pillar of smart cities. These drones can transport parcels efficiently, conserve resources, and improve delivery systems.

LiDAR technology has made sensors more affordable and expanded their use. Currently, U.S. companies are developing low-cost 4D LiDAR sensors to enhance performance in harsh conditions, such as dust, fog, rain, snow, and sunlight interference.

4D LiDAR sensors will be crucial to transport and robotics sectors within smart cities. As urban areas continue to evolve, light-based technologies and their adoption will determine whether Europe retains its position or new smart cities will emerge in 2025. At Altechna, we focus on providing custom photonics solutions, which can be applied to city needs.

One of the projects where Laurutis’s firm Altechna uses LiDAR technology is GALACTIC, aiming to improve climate modeling and enhance the monitoring of the planet’s surface regarding the impact of climate change.